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Gold/Mining/Energy : Winspear Resources

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To: average joe who wrote (11848)	1/13/1999 5:23:00 PM
From: Gord Bolton	Read Replies (1) of 26850

I believe that the size of the proven reserves has increased by about threefold since the initial feasability numbers were put out last August. Further drilling this winter may prove up to 10 million tonnes of $500.00 per tonne ore. That is very rich stuff and will come out of the ground. Open pit mining and processing of kimberlite can be done very efficiently even at Snap Lake. We are talking less than $20.00 per tonne and would decrease with the volume of ore. Last summer SUF was processing the overburden from the M1 at about $10.00 per tonne and yeilding around a $1000.00 per tonne. As you can see mining and processing diamonds can be very profitable. The great difficulty in the mining business has been finding economic ore. Layfield believes they can process ore in the Kalihari desert for about $2.00 per tonne. My own little calculater tells me that Winspear can mine the dyke, sill, cone sheet,(whatever) very profitably. I believe that the experts say payback in one year at 1000 tonnes per day based upon what is known now. The remaining question is just how much more ore can be defined on the property and will it have the same value as the North West dyke. I believe that the report last summer suggested a very conservative share value of $5.00 per share based upon info available to them prior to completion of drilling last summer. I think that both Bishop and Kaiser are fully expecting a run up to the $10, $15, $20 ... range and they are warning that it will be speculative at those prices and there will be mood swings as sentiments change. For all those who bought in at less than a dollar, the advice to sell 25% to protect your principle and let the rest ride the rocket is very sound advice. To suggest that there will be or should be worries below $5.00 is to very much misunderstand the basics of this play. That it is happening is a tribute to poor writing by some and poor reading by others. The reference to the similarities to Russian stones is very promising. The clear white Mir diamonds are among the best quality stones available. There is growing interest in fancy colours and the odd coloured stone may fetch some great prices. But I would take a pail full of clear whites over an assorted variety of coloured stones. Most coloured stones do not attract high values. This week Winspear was covering the gap and doing a little circling due to general uncertainties. Next week many will be saying that they wish they would have loaded up when Winspear was cheap at $3.60 per share. Good Luck Folks.

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